Labor relations involve many aspects such as economy, society, law and so on. It will cause a chain reaction if treatment inappropriate. With the continuous improvement of China's market economy system, labor relations have also undergone major changes. The most dramatic change is the increasing labor conflicts. China has significant features of the three-party game, and government should play a leading role. The practice of Zhejiang Wenling town of New River sweater industry also proved this argument. In the establishment of consultative mechanism to ease labor conflicts, government involvement is essential. The coordination and supervision of the government ensure the smooth operation of the wage negotiation mechanism, which provides an important guarantee for social harmony and stability.